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Foreign Property and Taxes

839 Views | 2 Replies | Last: 6 yr ago by drill4oil78
GCRanger
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AG
Anyone familiar with how ownership in foreign property is taxed.

My parents own an apartment in Ireland that will be willed to my sister and me. Mom is sole owner currently as dad passed away a few years ago. The apartment ownership will be split 50/50 and sister and I will have to agree to any future sales, changes, etc. My sister is a U.S. citizen but has lived in Ireland for 10+years. I'm here in Texas. The apartment is paid for.

Would I pay taxes on the value of the house once 50% ownership is given to me?
Do we pay zero tax until it is sold, if it is ever sold?

I'm sure I'll be liable to some Irish taxes on the home once I take ownership. I think they have a modest property tax, and there would be HOA fees, etc.

I'm heading over next week and wanted to start talking through this with my mom and sister so we have everything in order when the time comes.
drill4oil78
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As with any foreign property or business you must report that you own it to the IRS. I doubt you pay anything until you sell it or you have profits from it during the year. If you sell then it will be a capital gain. In your case it would be a cost of $0.00. I had stock in my business which was a foreign incorporated business and paid cap gains once I sold the stock. You have to report the value of any foreign real estate or stock on your yearly tax return.

Get a good tax accountant that understands foreign taxes. Many do not. Any profit you make will probably be taxed from the local government and you should be able to use those as tax credits against any US taxes.
OldArmy91
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What you do is keep your mouth shut and don't worry about uncle sam.
drill4oil78
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OldArmy91 said:

What you do is keep your mouth shut and don't worry about uncle sam.
In the past you could keep your mouth shut but now there is FBAR rules and a FACTA treaty . You can keep your mouth shut but the foreign entities like banks and businesses are required to report to the IRS if they have an American account holder or share holder. I know first hand .... I have/had foreign bank accounts and owned part of a foreign business. If you have a foreign business you will have a foreign bank account. If you don't report and you sell and then repatriate the funds in the USA without reporting you can be fined severely. If you don't report you can be fined severely.

Keeping your mouth shut these days is not a choice since most countries have signed own to the FACTA treaty.
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